Do ups and downs in income make it hard for you to save?
Last month, our research showed that 70% of SaverLife Savers experience ups and downs in income. These fluctuations can make it harder to budget and save. After all, how can you plan for your financial goals when you don’t know how your income will change every month?
We were shocked to learn how frequent and how intense these monthly income changes are for our Savers. The typical Saver experiences income volatility 3 out of every 4 months. On average, this works out to a whopping 9 months of the year when your income is at least 25% higher or lower than your average income.
Income swings are significant and frequent
Contrary to what many people think, income volatility can also involve spikes in income. In fact, over half of volatility events are increases in income. The median monthly dip is $1,208 and the median monthly spike is $1,346.
Even in months when Savers have more income to work with, they tell us that it may still be difficult to save. They’re still juggling income and expenses, and they sometimes have to catch up on bills and other expenses that they’ve put off during months of lower income.
Joey, a Saver from California, told us, “The income ups and downs have a huge impact. I have to watch everything I buy and be extremely frugal. Medical expenses are pretty big; because of the ACA I’m able to see basic doctors, but I have to pay for specialists out of pocket.”
Julia is part of EARN’s Research and Innovation Team. If you join SaverLife, you may get emails from Julia asking you to help with our research. These are always optional (and you can unsubscribe at any time), but your voice helps us improve SaverLife and understand how we can better serve our members.